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China Announces Billion-Dollar Investment in Data Center. Megaproject Promises to Launch a New Era of Supercomputing, Leaving the U.S. on Alert.
Amid U.S. restrictions on technology exports, China has taken a decisive step to lead the next era of supercomputing. Last Thursday (29), a senior government official announced a colossal investment of over 43.5 billion yuan (equivalent to US$ 6.12 billion) in a national megaproject for the construction of a state-of-the-art data center.
This strategic initiative aims to strengthen the country’s technological infrastructure, placing China at the global forefront and increasing tensions with the U.S.
Understand the Objective of China’s Megaproject
Liu Liehong, head of China’s National Data Bureau, announced the amount, updated until the end of June, at an industry conference in the city of Guiyang, in the southwest of the country, reported the state news agency Xinhua.
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Beijing officially launched the data center initiative, nicknamed East Data, West Computing, in early 2022, as part of President Xi Jinping’s effort to build a Digital China.
The investment in China’s megaproject for the data center comes at a time when the country is facing increasing restrictions from the United States, which have limited the exports of some advanced computing products, including those from the industry leader, NVIDIA, in recent years. In response, China has ramped up its efforts to develop its own advanced computing capabilities.
China’s data center megaproject includes plans to build eight large data centers, primarily located in the western regions. This strategy aims to utilize the abundant energy resources of the west and transfer computing capacity to the economic centers along the coast.
Over 200 Billion Yuan in Investments
In addition to the direct government spending on the data center, Beijing has also sought to attract other types of investment, including private capital.
The eight data centers of China’s megaproject have attracted over 200 billion yuan in total investment, according to Liu. He added that the project has installed more than 1.95 million server racks, with about 63% of them currently in use.
Launched in 2022, China’s megaproject has seen rapid progress in the construction of the eight national computing hubs. Additionally, China also plans to have 10 clusters of national data centers as part of the project.
Highlighting the steady progress of the data center megaproject, Liu states that the network latency between the east and west hubs generally meets the requirement of 20 milliseconds (ms), while the energy efficiency of the newly established data centers has been reduced to 1.04. The demand for computing power in the east is being met in the west, and the effects of aggregating computing power have begun to emerge, Liu added.
China Plans to Form Preliminary System by 2025
As computing capacity represents a new quality productive force in the era of the digital economy, Liu states that China will encourage cities to pilot various technical routes over the next two or three years in search of the best solution for building the national data infrastructure.
China aims to form a comprehensive preliminary computing energy infrastructure system by the end of 2025.
The China International Big Data Expo 2025 is currently taking place in Guiyang and concluded on Friday. The event attracted over 21,000 guests and featured participation from 414 national and international companies. Event participants include industry leaders such as Huawei, Alibaba, Tencent, Baidu, and JD.com, as well as 77 foreign companies from more than 30 countries and regions, including the United States, Germany, and Canada.
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